PERFORMANCE SCREEN SUPPLY, LLC v. RYONET CORPORATION

NOT FOR PUBLICATION

UNITED STATES DISTRICT COURT

DISTRICT OF NEW JERSEY

PERFORMANCE SCREEN SUPPLY,

LLC,

Plaintiff, Civil Action No. 22-6031 (GC) (RLS)

v.

MEMORANDUM OPINION

RYONET CORPORATION, RYAN

MOOR, ABC ENTITIES i-V, and JOHN

DOES I-V,

Defendants, □

CASTNER, District Judge

THIS MATTER comes before the Court upon Defendant Ryan Moor’s (“Moor”) Motion

to Dismiss the Complaint under Federal Rules of Civil Procedure (“Rule”) 12(b)(2) and 12(b)(6)!.

(ECF No. 4.) Plaintiff Performance Screen Supply, LLC (“Plaintiff’) opposed CECF No. 6), and

Moor replied (ECF No. 8). The Court has carefully considered the parties’ submissions and

decides the matter without oral argument under Rule 78 and Local Civil Rule 78.1. For the reasons

set forth below, and other good cause shown, the Motion to Dismiss (ECF No. 4) is GRANTED.

Because the Court dismisses Counts Two and Three of Plaintiff's Complaint against

Moor on personal jurisdiction grounds, the Court does not perform a Rule 12(b}(6) analysis.

L BACKGROUND

A. Factual Allegations

Plaintiff is a custom order printing company located in Manalapan, New Jersey. (ECF No.

1-191." Plaintiff sells goods and services around the world. Ud. at 15.) Moor formerly served

as the Chief Executive Officer (CEO) and majority shareholder of the Ryonet Corporation

(“Ryonet”) until Moor stepped down as CEO in 2021. Ud. at 4 2; ECF No. 8-1 97.) Ryonet, a

Washington corporation, operates a similar business as Plaintiff. Ud.) Like Plaintiff, Ryonet also

sells good and services around the world. Cd. at { 8.)

In of around 2015, Plaintiff learned that Ryonet was allegedly using the name and likeness

of Plaintiff's company name on various internet advertising websites, such as Google Adwords

and Dynamic Titles. (/d at 4/10.) Plaintiff alleges that Ryonet was using search terms such as

“performance screen supply” to target New Jersey residents and caused “a significant number of

[Plaintiffs] existing customers to inadvertently respond to such internet ads to do business with

Ryonet instead of [Plaintiff] to the detriment of [Plaintiff].” Gd at 12.) Plaintiff further alleges

that Ryonet was infringing on its trade name and unfairly misappropriating its existing customers.

(id. at 13.) Ryonet settled with Plaintiff for $5,000.00 and agreed in part to “reverse the harm to

[Plaintiff] for previous trade name infringement violations” and “not use or seek to apply” to

register the phrase “performance screen supply” as Ryonet’s own trademark, Cd. at {15 (citing

ECF No, I-1 at 12-14).)

Plaintiff alleges that in or around April 2022, it discovered that Ryonet was using Plaintiff's

trade name, in violation of their settlement agreement (hereinafter “Settlement Agreement” or

2 Citations to page numbers within record documents G.e., “ECF No.”) refer to the page

numbers stamped on the documents by the Court’s e-filing system.

“Agreement”), as Moor was allegedly using the phrases “performance screen supply” and

“performance screen supplies” through internet advertising services. (fd. at 718.) Plaintiff further

alleges that Moor has “individually conducted and authorized ... settlement agreement breaches,

unfair trade practices[,] and trade infringement.” (Ud. at J 20.)

B. Procedural History

Plaintiff filed this lawsuit on September 8, 2022, in the Superior Court of New Jersey,

Monmouth County, Chancery Division. See Performance Screen Supply, LLC vy. Ryonet

Corporation, Ryan Moor, et al., Docket No. MON-C-000142-22. Plaintiff asserted four counts:

breach of contract; federal unfair competition violations under 15 U.S.C. § 1125(a)); violation of

the New Jersey Fair Trade Act under N.J. Stat. Ann. § 56:4-1; and common law trade infringement

and unfair competition. * (ECF No. 1-1 at 7-8.) Defendants then removed the case to this Court

on October 11, 2022. (ECF No. 1.) Moor now moves to dismiss Counts Two and Three against

him under Rule 12(b)(2) for lack of personal! jurisdiction or, in the alternative, Rule 12(b)(6) for

3 The Court does not construe “Count One” as asserting a separate cause of action, but rather

as setting forth the facts common fo ail counts and setting forth a prayer for relief. Moor states in

his moving brief that only Counts Two and Three are asserted against him individually. (See, e.g.,

ECF No. 4-1 at 8.) Plaintiff does not appear to refute this point in its opposition, and therefore has

waived its right to challenge Moor’s argument. Lawlor v. ESPN Scouts, LLC, Civ. No. 10-5886,

2011 WL 675215, at *2 (D.N.J. Feb. 16, 2011) (“Where an issue of fact or law is raised in an

opening brief, but it is uncontested in the opposition brief, the issue is considered waived or

abandoned by the non-movant.”). Although Count One is not a proper cause of action, the Court

will refer to the counts as titled in the Complaint.

failure to state a claim, (ECF No. 4-1.)

II. LEGAL STANDARDS AND DISCUSSION

A. Personal Jurisdiction

The Court must first evaluate Defendant’s personal jurisdiction arguments. See Sinochem

Co. v. Malaysia Int’l Shipping Corp., 549 U.S. 422, 430-31 (2007) (“A federal court generally

may not rule on the merits of a case without first determining that it has jurisdiction over the

category of claim in suit (subject-matter jurisdiction) and the parties (personal jurisdiction).”).

“Federal Rule of Civil Procedure 12(b)(2) provides for dismissal of an action when the Court does

not have personal jurisdiction over a defendant.” Dazielak vy. Whirlpool Corp., Civ. No. 12-89,

2018 WL 6985013, at *2 (D.N.J. Dec, 21, 2018), report and recommendation adopted, 2019 WL

145608 (D.N.J. Jan. 8, 2019).

The Court may exercise personal jurisdiction over a non-resident defendant to the extent

permitted by New Jersey’s long-arm statute. Murphy v. Eisai, Inc., 503 F. Supp. 3d 207, 221

(D.N.J. 2020). New Jersey’s long-arm statute permits the same protections afforded by the Due

Process Clause under the Fourteenth Amendment of the United States Constitution. Miller Yacht

Sales, Inc. v. Smith, 384 F.3d 93, 96 Gd Cir. 2004) (citing N.J. Ct. R. 4:4-4(c)). Therefore, the

Court may exercise personal jurisdiction so long as Moor maintains “certain minimum contacts

with [New Jersey] such that the maintenance of the suit does not offend traditional notions of fair

play and substantial justice.” Henry Heide, Inc. v. WRH Prods. Co., Inc., 766 F.2d 105, 108 3d

Cir, 1985) (quoting Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (internal quotations

omitted)).

“Minimum contacts can be analyzed in the context of general jurisdiction or specific

jurisdiction.” Mercalfe v. Renaissance Marine, Inc., 566 F.3d 324, 334 3d Cir. 2009)), “General

jurisdiction requires a ‘rigorous’ burden of proof whereby a plaintiff must show that a defendant’s

contacts are continuous and substantial.” Bernisky v. Baylor Trucking, Ine., Civ. No. 06-6246,

2007 WL 1963525, at *2 (D.N.J. June 29, 2007) (citing Giangola v. Walt Disney World Co., 753

Supp. 148, 154 (D.N.J.1990)). “For an individual, the paradigm forum for the exercise of

general jurisdiction is the individual’s domicile.” Goodyear Dunlop Tires Operations, S.A. v.

Brown, 564 U.S. 915, 924 (2011)

“Specific jurisdiction over a defendant exists when that defendant has purposefully directed

his activities at residents of the forum and the litigation results from alleged injuries that arise out

of or relate to those activities.” Miller Yacht Sales, 384 F.3d at 96 (citing Burger King Corp. □□

Rudzewicz, 471 U.S. 462, 472 (1985) (internal quotation omitted)). “This purposeful availment

requirement ensures that a defendant will not be hauled into a jurisdiction solely as a result of

random, fortuitous, or attenuated contacts... .” Burger King, 471 U.S. at 475 (internal citations

and quotations omitted). To add, “[a] specific jurisdiction analysis is claim-specific.” Vectra

Visual, Inc. v. Hoving, Civ, No. 21-03296, 2021 WL 4520339, at *5 (D.N.J. Oct. 4, 2021) (ciling

Remick v. Manfredy, 238 F.3d 248, 255 (3d Cir. 2001)). Moreover, for a court to exercise

jurisdiction consistent with due process, the defendant’s suit-related conduct must create a

substantial connection with the forum State. Walden v. Fiore, 571 U.S. 277, 284 (2014).

The Third Circuit has established a three-part test for determining when a court can assert

specific jurisdiction over a defendant. See O’Connor v. Sandy Lane Hotel Co., 496 F.3d 312, 315

(Gd Cir, 2007). First, a defendant must purposefully direct its activities at the forum. /d. at 317.

Second, the claim must arise out of or relate to at least one of the activities mentioned under the

first factor. Jd “In evaluating the relatedness requirement with regard to a contract claim, courts

should inquire whether the defendant’s contacts with the forum were instrumental in either the

formation of the contract or its breach.” Maximum Quality Foods, Inc. v. Joseph DiMaria, Civ,

No. 14-6546, 2015 WL 1865754, at *7 (D.N.J. Apr. 20, 2015).

“And, third, if the prior two requirements are met, a court may consider whether the

exercise of jurisdiction otherwise comports with fair play and substantial justice.” See O'Connor,

496 F.3d at 315 (internal citation omitted). “The Supreme Court has indicated that lower courts

addressing the fairness question may consider the burden on the defendant, the forum State’s

interest in adjudicating the dispute, the plaintiff's interest in obtaining the most efficient resolution

of controversies, and the shared interest of the several States in furthering fundamental substantive

social policies.” Miller Yacht Sales, 384 F.3d at 97 (citing Burger King, 471 U.S. at 477) (internal

quotations omitted).

1, Count Two (Breach of Contract)

Plaintiff claims that this Court has general jurisdiction over Moor because Moor has

“continually presented himself in New Jersey to promote his company’s business at the annual

tradeshows held in Atlantic City, New Jersey.’4 (ECF No. 6 at 1 (cleaned up).) Plaintiff further

adds that Moor stays in New Jersey for at least a week every year for his tradeshow attendances,

However, Plaintiff does not allege that Moor is domiciled or resides in New Jersey. Goodyear,

564 US. at 924 (“For an individual, the paradigm forum for the exercise of general jurisdiction is

the individual’s domicile.”), To the contrary, Moor is a resident of Brush Prairie, Washington.

(ECF No, 8-1 13.) Plaintiff also fails to cite any caselaw suggesting that Moor’s contacts with

New Jersey are so substantial, continuous, and systematic for the Court to exercise general

4 “Plaintiff is entitled to have its allegations taken as true and all factual disputes drawn in

its favor.” Adifler Yacht Sales, 384 F.3d at 97.

_ jurisdiction over Moor. See Perkins, 342 U.S, at 446. For these reasons, the Court cannot find

that it has general jurisdiction over Moor.

To add, construing Plaintiff's allegations as true, the Court does not have specific personal

jurisdiction over Moor regarding the breach of contract claim against him. Specifically, Plaintiff

alleges that he discovered in or around April 2022 that Ryonet was breaching the Settlement

Agreement and that Moor directed Ryonet to breach the Settlement Agreement. (ECF No. 1-1

18.)

Based on the O'Connor factors, the Court cannot exercise specific jurisdiction over Moor

on Count Two as Count Two involves the breach of the Settlement Agreement to which Moor is

not a party. See O’Connor, 496 F.3d 312 at 324. The Settlement Agreement is between

Performance Sereen Supply, LLC and Ryonet.* (ECF No. 1-1 at 12.) The Agreement does not

mention or suggest that Plaintiff intended to bind Moor to the Agreement as an individual, nor

does it mention or suggest that Moor intended to be individually liable under the Settlement

Agreement. Although Moor signed the Settlement Agreement, Moor signed on behalf of Ryonet

as its CEO and Ryonet was thereby bound by the Settlement Agreement. (ECF No. 1-1 at 12-

14.)

Since Moor was not a party to the Settlement Agreement, the Court does not have specific

jurisdiction over Moor with respect to the breach of contract claim. Hardwick v. Consumer

Guardian Specialists, LLC, Civ. No. 20-00060, 2021 WL 1152739, at *4 (W.D. Pa. Mar. 26, 2021)

5 The Court notes that “[jJurisdiction over an employee [or an officer of an organization]

does not automatically follow from jurisdiction over the corporation [or entity] which employs

him ... Each defendant's contacts with the forum State must be assessed individually.” MVE.

Inc. v. Cosm. Indus. & Trade Corp., Civ. No. 09-3412, 2010 WL 1381482, at *4 (D.N.J. Apr. 5,

2010) (citing Keeton v. Hustler Magazine Inc., 465 U.S. 770, 781 n.13 (1984)).

that the dispute partially arose from).°

Next, Plaintiff argues that the Court has personal jurisdiction over Moor because the Court

should pierce the corporate veil and hold Moor individually liable for the alleged breach of the

Settlement Agreement, asserting, without support or reference to the record, that “[Moor]

apparently runs Ryonet himself by making all its decisions.” (ECF No. 6-1 at 3-4,)

Plaintiff is correct that in limited circumstances, the Court may find personal jurisdiction

over a defendant through the piercing of the corporate veil.’ Air Sea Int’l Forwarding, 2008 WL

11510000, at *4 (“Where an individual or a corporation has insufficient contacts with the forum

state to satisfy personal jurisdiction, a court may assert personal jurisdiction if the individual or

6 Based on Plaintiff's Complaint alone, the Court does not have personal jurisdiction over

Moor as to Count Two. While the Court need not rely on Moor’s sworn declaration in reaching

its decision, the Court notes that several of Moot’s factual declarations further support the notion

that the Court lacks personal jurisdiction over Moor, individually. (See generally ECF No, 8-1.)

For example, Moor began transitioning his day-to-day management responsibilities of Ryonet to

Brandon Schmunck in 2019 and then stepped down as CEO in 2021. Ud. at | 8.) Meaning, as of

April 2022, the time Plaintiff discovered the violations underlying this lawsuit, Moor was no

longer the CEO of Ryonet. While Moor stills serves as the Chairman of Ryonet’s Board of

Directors, Ryonet has three other directors on its board. Cd. at 46.) The Board holds annual

meetings and keeps records of the meetings. (/d.) Ryonet has a single shareholder, MARRS Inc.,

and MARRS has ten shareholders and is governed by a board of directors. Ud. at 94.) As of

November 2022, Ryonet had 62 employees, was solvent, and maintained separate bank accounts

from Moor. (Ud. at 3, 9, 10.3

7 “The sheer weight of authorities supports the theory that the laws of the state of

incorporation govern whether to pierce the corporate veil.” Air Sea Int'l Forwarding, Inc. v. Glob.

Imports & Trading, Inc., Civ. No. 03-268, 2008 WL 11510000, at *7 (D.N.J. Apr. 18, 2008),

report and recommendation adopted, Civ. No. 03-268, 2008 WL 11309999 (D.N.J. June 3, 2008).

Here, Ryonet is incorporated in Washington. To pierce the corporate veil, two requirements must

be met: “First, the corporate form must be used to violate or evade a duty and second, the fact

finder must establish that disregarding the corporate veil is necessary and required to prevent an

unjustified loss to the injured party.” Northgate Ventures LLC v. Geoffrey H. Garrett PLLC, 10

Wash. App. 2d 850, 866 (2019) (citing Columbia Asset Recovery Grp. LLC v, Kelly, 177 Wash.

App. 475, 486 (2013)), Moreover, “[v]Jeil piercing is an equitable remedy imposed to rectify an

abuse of the corporate privilege.” NW. Cascade, Inc. v. Unique Const, Inc., 187 Wash. App, 685,

702, (2015).

corporation are alter egos or a successor of a corporation that would be subject to personal

jurisdiction before this court.” (citing In Re Nazi Era Cases Against German Defendants

Litigation, 153 Fed. Appx. 819, 825 (3d Cir. 2005))). But here, Plaintiff fails to establish with

“reasonable particularity” sufficient facts as to how Moor runs Ryonet by himself and makes all

of its decisions in a way that would subject Moor to a veil piercing claim. Mellon Bank (E.) PSFS,

Nat. Ass’n vy. Farino, 960 F.2d 1217, 1223 Gd Cir. 1992) (stating that the plaintiff must establish

“with reasonable particularity sufficient contacts between the defendant and the forum state” to

support jurisdiction (quoting Provident Nat. Bank v. California Fed. Say. & Loan Ass'n, 819 F.2d

434, 437 (3d Cir. 1987))). Plaintiffs single allegation from the Complaint alleging that “Moor

has individually conducted and authorized the foregoing actions” is too conclusory to alone

establish a prima facie case for personal jurisdiction. See O’Connor v. Dodge Co., Inc, Civ, No.

16-5177, 2016 WL 6824372, at *3 (D.N.J. Nov, 17, 2016) (rejecting a “mere conclusory

statement” for establishing personal jurisdiction”). The Court notes that at the pleading stage,

“Iwhile Plaintiff need not conclusively prove its position, it still must put forth sufficient facts

such that it would be reasonable for this Court to exercise jurisdiction over the Defendants.” Air

Sea, 2008 WL 11510000, at *9 (finding that the court could not allow the veil piercing claim to

proceed where Plaintiff failed to plead sufficient facts for the court to exercise personal jurisdiction

under the claim). Here, Plaintiff fails to allege that Moor used the corporate form to violate or

evade a duty. Northgate Ventures, 10 Wash. App. 2d at 866. Moreover, Plaintiff does not allege

that Moor abused any corporate privilege. Cascade, 187 Wash. App, at 702, Following this,

the Court finds that Plaintiff has not alleged sufficient facts to permit the Court to exercise personal

jurisdiction over Moor under a veil piercing claim.

The Court’s inquiry does not stop here as Plaintiff requests jurisdictional discovery on the

veil piercing allegations as he alleges that Moor “regularly ignores the corporate form and treats

Roynet as his own.” (ECF No. 6 at 4.) “Ifa plaintiff presents factual allegations that suggest with

reasonable particularity the possible existence of the requisite contacts between [the party| and the

forum state... the plaintiff's right to conduct jurisdictional discovery should be sustained.” Toys

“R” Us, Inc. v. Step Two, S.A., 318 F.3d 446, 456 (3d Cir. 2003) (“Plaintiff bears the burden of

demonstrating facts that support personal jurisdiction.”) (citation omitted). “[J]urisdictional

discovery is appropriate when the existing record is ‘inadequate’ to support personal jurisdiction

and ‘a party demonstrates that it can supplement its jurisdictional allegations through discovery.’”

Flower v. Techtronic Indus. Co., Civ. No 09-2736, 2011 WL 3667512, at *2 (D.N.J. Aug. 22,

2011) (internal citation and quotations omitted). “Where the defendant is an individual, the

presumption in favor of discovery is reduced.” Massachusetts Sch. of L. at Andover, Inc. v. An.

Bar Ass’n, 107 F.3d 1026, 1042 (3d Cir. 1997) (“Jurisdictional discovery generally relates to

corporate defendants and the question of whether they are ‘doing business’ in the state.”).

Courts are cautioned not to grant jurisdictional discovery when it will only serve as “a

fishing expedition based only upon bare allegations, under the guise of jurisdictional discovery,”

Witasick v. Estes, Civ. No. 11-3895, 2012 WL 3075988, at *7 (D.N.J. July 30, 2012) (citing LaSala

v. Marfin Popular Bank Pub. Co., Ltd., 410 Fed. Appx. 474, 478 (3d Cir. 2011)).

Here, the Court will not grant Plaintiff's passing request for jurisdictional discovery. (ECF

No. 6 at 4 (stating “[ffurther discovery will likely demonstrate as well that [Defendant] regularly

ignores the corporate form and treats Ryonet as his own.”).) Plaintiffs allegation that Defendant

ignores the corporate form, which Plaintiff raises for the first time outside of the Complaint but

provides no facts in support, is mere speculation and thus does not warrant discovery. See Seafood

10

Co. v. Holt Cargo Sys., Inc., Civ. No. 96-5217, 1997 WL 539763, at *8 (E.D. Pa. Aug. 11, 1997)

(denying jutisdictional discovery because plaintiff only presented speculative reasons why the

court should discuss jurisdictional discovery); Witasick, 2012 WL 3075988, at *7 (denying

jurisdictional discovery because the plaintiffs request for jurisdictional discovery was frivolous);

Reading y. Sandals Resorts Int'l, Lid., Civ, No, 06-3511, 2007 WL 952031, at *4 (D.N.J, Mar, 28,

2007) (denying request for jurisdictional discovery as frivolous because the plaintiff failed to rebut

the defendant’s assertion that he had no connection to New Jersey); Benitez v. JMC Recycling Sys.,

Ltd., 97 F. Supp. 3d 576, 584 (D.N.J. 2015) (denying jurisdictional discovery due to “absence of

any factual allegations that would support personal jurisdiction.”),; Rose v. Granite City Police

Dep't, 813 F. Supp. 319, 321 (E.D. Pa. 1993) (“The Court chooses to exercise its discretion here

and deny Plaintiff's motion requesting discovery because Plaintiff has failed to make even a

threshold prima facie showing that the Court has jurisdiction over... Defendants.”)

Moreover, as is the situation here, the presumption in favor of jurisdictional discovery is

reduced when the defendant is an individual and not a corporation, See Massachusetts Sch. of L.

at Andover, Inc, 107 F.3d at 1042. For these reasons, the Court denies Plaintiffs request for

jurisdictional discovery.

2. Unfair Competition (Count Three)

The Court must also dismiss Count Three for unfair competition as against Moor for lack

of personal jurisdiction.

As noted above, “jurisdiction over an employee [or an officer of an organization] does not

automatically follow from jurisdiction over the corporation [or entity] which employs [them.]”

Hardwick, 2021 WL 1152739, at *5 (citation omitted). Therefore, to determine whether the Court

has personal jurisdiction over Moor on Count Three, the Court must determine whether Moor has

11

sufficient minimum contacts with New Jersey in his personal capacity. fd Additionally, because

Plaintiff argues that the Court has personal jurisdiction over Moor due to his status as the former

CEO of Ryonet, the Court must evaluate whether Moor’s acts in his official capacity as CEO of

Ryonet created sufficient contacts with New Jersey. Jd.

The Court finds that Plaintiff fails to allege that Moor has sufficient contacts with New

Jersey on a personal level or in an official capacity as the former CEO of Ryonet. Plaintiff alleges

that the Court has jurisdiction over Moor because he regularly conducts business in New Jersey

and because Defendant used to annually attend a tradeshow in Atlantic City, New Jersey, from

2012 to 2019. (ECF Nos. 1-1 § 3; 6-1 § 9.) However, Plaintiff fails to allege that the unfair

competition claim has any connection to Moor’s attendance at the annual Atlantic City trade show

from 2012 to 2019. In fact, Plaintiff claims that the wrongful conduct was discovered “in or about

April 2022,” nearly three years after Moor last attended a tradeshow in New Jersey. (ECF No. □□

1918.) Other than the conclusory allegation that: “[Moor] . . . individually conducted and

authorized the foregoing actions that constitute ... unfair trade practices” (ECF No, 1-1 { 20),

Plaintiff fails to plead any basis, much less than with reasonable particularity, that the Court has

personal jurisdiction over Moor as applied to the unfair competition claim, Mellon Bank, 960 F.2d.

at 1223. Therefore, the Court dismisses Count Three as against Moor for lack of personal

jurisdiction.

12

Hi CONCLUSION

For the foregoing reasons, and other good cause shown, Moor’s Motion to Dismiss (ECF

No. 4) is GRANTED and Counts Two and Three as against Moor are dismissed without prejudice.

An appropriate Order follows.

Dated JulyS!, 2023 AMMA LIAS

Gfoxc wf TE CASTNER

UNITED STATES DISTRICT JUDGE

13